by Martin MacGregor (@MartMacG) Media investment is the largest line item in a marketing budget. Finance and procurement know this, and are putting marketing under increasing pressure to justify investment on audience reach, without demonstrating tangible impact on the business bottom line.
The opportunity cost of media spend comes under scrutiny when, for example, placing three TV ads in 7de Laan on SABC 2 costs the same as setting up a decent website for the company. Or when running a price promotion has the same knock-on margin as telling people about it. In fact, for just three weeks on radio, a company could afford a senior staff member for a year.
Rising costs and fragmentation
Coupled with rising costs of media inventory comes the fragmentation of audiences. People are choosing to consume content in their own time in niche interest spaces, rather than in the mainstream, general environments it has been traditionally served. Building advertising traction against fragmented audiences is more difficult and more expensive.
Hence the popularity of digital media.
In the past, digital has contributed to audience fragmentation more extensively than any other media touchpoint. But, with the advent of programmatic buying, inventory can be bought and optimised based on consumer response, such as clicks, which ultimately acknowledge that the ad has been seen.
Businesses can then calculate the value of a click or lead to their companies, weigh this up against the cost of the inventory and work out the return on their media rand. Programmatic buying sees digital attracting a growing share of media budgets across the world.
Global question marks
But there are global question marks over the impact of straight banner advertising, and it has been recognised that multimedia synergy can be more impactful in delivering complex communication objectives.
The problem is that the way traditional media performance is measured is difficult to link back to business performance. Today, audience research is used to inform how advertising is served across TV, radio and print touchpoints. And, when compared to response-based planning on digital platforms, planning using ARs is blunt and inadequate.
In South Africa, we have advanced audience-based methodologies that account for the demographic diversity of our country. In the past, this research was owned by both marketers and media owners, each on opposite sides of the trading field, thus keeping results honest and credible. Sadly, from 2016, media owners are taking over the data and the media planners will be left using performance metrics controlled by those selling the inventory.
This aside, the best indication of advertising success using audience-based measurement is how many people were potentially reached by the ad, and also maybe how many times they had the opportunity to see it.
Doesn’t make sense
Some media agencies table these results alongside other performance metrics such as PR value, digital impressions and social media metrics in neat dashboards to summarise the impact of the campaign. However, it doesn’t always make sense to table results that have been sourced differently alongside each other, unless you understand the impact each of those efforts have had on the business or brand.
Things start getting interesting when campaigns are designed to deliver measureable results. For example, when TV ads call for sms response, or radio ads encourage web traffic. If the business is set up to convert these leads into customers, the value of that consumer can be tracked back to the media investment.
Next-level media planning will take clients’ response data, isolate it from non-communication-related factors, and attribute the effect back to the media input, be it on TV, radio or print. By doing so, budget may be optimised based upon the lowest cost-per-lead. Efficiencies can be measured across channel, daypart, day of week and time of year, while different campaign requirements and brand objectives will influence the source of the response.
Over time, benchmarks can be developed for different industries and media planners can provide sharper, business-based projections that marketers can sell into their financial counterparts.
Response-based planning
Response-based planning across multimedia touchpoints is already being applied for some insurance brands. It is proven that audience-based planning delivers only 18% of the leads generated by response-based planning, suggesting that using ARs to plan media may deliver reach, but not necessarily the right kind. Response-based planning neither discriminates against age, race nor income, but instead optimises plans against environments that deliver people who are likely to respond to the brand call to action.
Often these environments are not primetime media buys, but rather off-peak or unexpected genres. Primetime inventory not only costs more because it delivers bigger audiences, but also because it attracts demand from advertisers. By veering away from premium primetime buys, response-based planning may save the advertiser up to 40% on inventory costs.
Response-based planning opens up markets where audience measurement is fragmented and biased. For a long time, the media landscapes for African countries have presented a black hole for media planners. If response data can be linked to advertising pressure, through attribution modelling, it will be possible to project accurately the ultimate touchpoint mix and budget requirement across any border.
Thus the future of media planning will be response-led. Audience-based research will be used to determine the verticals to fish for responses, but merely as a guide for human discretion. Premium buys will still have significance for their association value in building brand equity, and it will be up to the media planner to decide the appropriate balance between efficiency and environment buys, based upon the brand’s objectives.
Martin MacGregor (@MartMacG) is managing director of Connect, an M&C Saatchi Company, with offices in Johannesburg and Cape Town. Martin has spent 18 years in the industry, and has previously worked at Ogilvy and was MD of MEC Nota Bene in Cape Town. He will contribute the monthly “Media Redefined” column, in which he will challenge norms in the media space, to MarkLives.com.
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